To counter “remaining high inflation,” the Bank of Canada raised its key rate by 75 percentage points, from 2.5% to 3.25%.
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“The development of the global and Canadian economies largely follows the projection published by the Bank in July. The effects of COVID-19 outbreaks, ongoing supply disruptions and the war in Ukraine continue to dampen growth and drive up prices,” the Bank of Canada said in a statement Wednesday.
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She also noted that in Canada, “surveys indicate that near-term inflation expectations remain elevated. And the longer they remain so, the more the strong inflation is likely to take root”.
The Governing Council of the Bank of Canada judges that the key rate “will have to increase further”.